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SGMA 591 Chapter 5 Exam With Verified Solutions
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SGMA 591 Chapter 5 Exam With Verified SolutionsProduct lifecycle stages - Introduction, growth, maturity, decline
introduction/emergence - Sales are small and the rate of market penetration is low
because the industry's products are little known and customers are few. High cost, low
quality. Technology advance rapidly. Wide variety of products that reflect diversity of
tech and design. Competition is primarily between alternative technologies and design
configurations.Customer innovation oriented and risk tolerant
start up
de alio entrants
born global companies
De alio entrants - Answer = established firms diversifying from related industries
born-global companies -Answer companies that operate internationally from their
inception. Derive significant competitive advantage from the use of resources and the
sale of output in multiple countries.
how to be successful in introduction - Answer nvestment requirements grow and
financial resources become increasingly important. Capabilities in product development
also need to be supported by capabilities in manufacturing, marketing and distribution.
growth stage - Answer accelerating market penetration as technical improvements and
increased efficiency open up the mass market.
Dominant design
Overseas demand may be serviced initially by exports, but the drive to reduce cost and
associated changes in production processes reduces the need for sophisticated labour
skills and makes production attractive in newly industrialized countries. Eventually,
production and assembly may shift away from the advanced countries and these
countries may start to import.
, Dominant design: is a product architecture that defines the look, functionality, and
production method for a product. The architecture becomes generally accepted by the
industry as a whole. Defines the product and its core feature: Iphone
growth stage how to succeed - Answer SCALING UP As the market grows, the company
must change its product design and its manufacturing capacity to large-scale production.
To use increased manufacturing capacity, distribution access becomes critical.
maturity how to succeed - Answer demand is completely for replacement.
Cost efficiency through scale economies, low wages and low overheads become the key
success factors'shakeout' stage
shake out phase - firm failure rate grows significantly. In such a context, would depend
particularly upon the balance of capacity and demand, and on the level of international
competition.
commoditization and de-skilling of production processes and shift of production to newly
industrializing nations with lower wages.
How to be successful during maturity phase - Answer competitive advantage is
increasingly a quest for efficiency, particularly in industries that tend towards
commoditization. Cost efficiency through scale economies, low wages and low
overheads become the key success factors
Decline - Answer industry becomes challenged by new industries that produce
technologically superior substitute products. Technical substitution, change in consumer
preference, demographic shifts, foreign competition.
decide whether declining industry becomes a competitive bloodbath: balance between
capacity and output and nature of the demand for the product.
excess capacity;
lack of technical change (reflected in a lack of new product introduction and stability of
process technology);
declining number of competitors but some entry as new firms acquire the assets of
exiting firms cheaply;
high average age of both physical and human resources;
aggressive price competition.
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